When you buy your home will you “settle” for an asking price, list price, and or a conditional sale? No you won’t, you’re going to fight for it and if you’re new to this game you’ll soon learn that if you want that house or condo, you’ll have to EARN it.
It is not uncommon to hear of a house being sold for “Over Asking”. Recently the Huffington post did a blog about this very topic. Other industry reports indicate that 37% (6,583) of houses sold in Toronto went for “Over Asking”.
But don’t be discouraged – a good realtor can help you prepare. If a bidding war is imminent and it can’t be avoided then at least make sure you’re fully informed and know what you’re getting for the price you’re paying.
Know your Market
Once your realtor has helped find your dream home it’s time to prepaid that offer.
Here information is key – and you’ll need as much information and data as possible – it may be the difference between paying $10k instead of $100k. Don’t worry this is where your realtor is able to do all the heavy lifting with a Comprehensive Market Analysis (CMA), the analysis includes:
- Properties that have sold and closed within the last 12 months
- Active listings – properties currently for sale
- Pending sales – listings that have sold but not yet closed
- Expired listings – properties that did not sell during the listing period
This information is vital if you are serious about putting in an offer. Don’t be surprised if the report indicates a difference in price either. Your realtor will walk you through it; they’ll also enable you to understand it in more detail.
So you made your offer and now the waiting game. Your offer is either under asking, at list price or over – but regardless of what it is you want the house.
The question is, why would you go in over asking and not under or at list price? The simple answer is: because you like everything about it, and you are willing to go that little bit further to try and influence the seller because you want it as your next home or investment.
There are many conversations and other theories about over asking and how it is affecting the housing market etc. My suggestion is; if you do go in Over Asking make sure you are comfortable with it. If it seems logical and you can afford it then consider it, if you feel you are putting in a lot e.g. $100’s over asking, then I would suggest you review your CMA, make sure you’ve done the mortgage stress test to ensure you can afford it and that you are 100% sure.